3 Ination forecasting

This task needs to be done using SAS Viya for Learners platform. Assume that you are an economist working at the Reserve Bank of Australia (RBA), and you have been tasked to forecast quarterly ination for the next 4 quarters (i.e, Sep-2023, Dec- 2023, Mar-2024, and Jun-2024) using autoregressive moving average (ARMA) type models. Historical ination data can be downloaded from RBA website: https:// www.rba.gov.au/statistics/tables/xls/g01hist.xls?v=2023-10-04-10-19-06. The variable of interest is Consumer price index; Year-ended change (in per cent) (GCPIAGYP). You should generate the predictions using the ination data: from Dec-1959 to Jun-2023 and then for shorter period, i.e. from Jun-2005 to Jun-2023, and then compare the results. In the analysis, you may set `Binning interval' (under Options) to `Automatic' (this will make the time series plots look nicer). Create presentation slides (e.g., using MS PowerPoint) that include: time series plots with the forecast the models SAS Visual Analytics used predicted ination for the next 4 quarters 90% forecast condence for the rst quarter forecast (how do you interpret those values?). 5

Next, include real gross domestic product (GDP) growth as an underlying factor and repeat the analysis above. Use series `Gross domestic product: Chain vol- ume measures' (A2304402X) in 5206001_key_aggregates.xls le.1 You will need to merge (or join) the ination time series with GDP time series using date (you can merge the time series using Excel or any other software if using SAS Viya platform is too hard). That is, add to your presentation slides: time series plots with the forecast the models SAS Visual Analytics used predicted ination for the next 4 quarters discussion whether adding the underlying factor leads to substantially dierent forecasts 90% forecast condence for the rst quarter forecast (how do you interpret those values?). Lastly, perform the scenario analysis. Decrease GDP growth to 1 per cent in Sep-2023 (leave other values unchanged). Then add to your presentation slides: time series plot with the forecast and GDP growth brief comparison with the previous results (in other words, does expected lower GDP growth impact your ination forecast?). 1Source: https://www.abs.gov.au/statistics/economy/national-accounts/ australian-national-accounts-national-income-expenditure-and-product/jun-2023/ 5206001_Key_Aggregates.xlsx.